Blog

Study Shows Health Care Economic Impact

A good local health care system may itself be part of the prescription for maintaining a healthy rural economy.

That was the bottom line from a study of the economic contribution of Dickinson County’s health care system produced by researchers at K-State Research and Extension.

The study is part of a statewide initiative called the Kansas Rural Health Works program sponsored by the Kansas Hospital Association. As part of the program, a county-level analysis of the economic impacts and potential of the local health care sector on the economies of each of the state’s 105 counties has been generated.

According to the report, the health care sector accounted for an estimated 9.0 percent of Dickinson County’s total employment, or about 865 jobs, in 2016. Further, the study’s authors calculated economic multipliers for 13 health care sectors and estimated that health care directly and indirectly accounted for 1,082 jobs throughout the county economy. They go on to estimate that these same sectors accounted for more than $54,464,000 in total county income and about $13,862,000 in county retail sales.

Harold Courtois, Memorial Health System CEO, who released copies of the report, said he was somewhat surprised by the overall scale of the existing activity in the county. “I think, sometimes, we tend to take our local health services for granted,” he said. “We don’t realize how important health care is to the county’s economic well-being.”

That is exactly the point the reports are trying to get across, according to Dr. John Leatherman, agricultural economist at K-State’s Office of Local Government and lead author of the report. He points out that access to affordable quality local health care services is essential to attracting and retaining local businesses and retirees.

Further, health care has been among the fastest growing economic sectors for the past 30 years. Given demographic trends, prospects for continued growth are good, and rural communities will want to be in a position to capture some of that growth, he said.

“Research has shown time and again that local health care and education are two enormously important factors for economic development,” Leatherman said, “and both can be positively or negatively influenced by local action or inaction.” He said the local health care system has sometimes been the “tie-breaker” in industry location decisions and that retirees view quality local health care as a “must have” local service.

Given the rapidly changing economics of health care systems, communities need to become more proactive in building a sustainable mix and level of services or risk losing local access, according to Tom Bell, President and CEO for the Kansas Hospital Association.

“It is important for all Kansans to be aware of the local events and recent data that paints a picture of vulnerability for rural hospitals in addition to lack of coverage to our citizens and lost revenue to our state.”

The Rural Health Works program is intended to highlight the need for local organization and initiative to maintain rural health care systems. Bell likened the need for broad community involvement focused on local health care to trying to maintain the local school district or Main Street businesses. “Inattention and inactivity can place a rural community at risk. Maintaining local access to quality health care services in rural places requires organization, planning and community support,” Bell said.

“Kansas hospitals are a critical piece of the economic engine in Kansas communities and a symbol of continued community cohesion. They are important not only for the health care services they deliver, but for maintaining the overall economic vitality and viability of the communities they serve,” said Bell.

Some rural hospitals face a unique set of challenges because of their remote geographic location. Most rural hospitals face challenges such as small size, scarce workforce, physician shortages, higher percentage of Medicare and Medicaid patients, and constrained financial resources with limited access to capital.

The Kansas Rural Health Works program has been providing rural community health care strategic planning assistance since 2005, and has been offering assistance in completing Community Health Needs Assessments required by the federal Affordable Care Act and public health department accreditation.

Copies of the full report have been distributed and are available free of charge at the Kansas Rural Health Works Web site at: www.krhw.net. Printed copies are available at cost plus shipping. Additional information about the program is available by contacting the Office of Local Government at K-State Research and Extension, 785-532-2643 or e-mailing jleather@ksu.edu.